This is a guest post from Edwin Hayward, who has been involved in the domain name industry since 1996. He set up the first dedicated domain name news and information website, Internet Goldrush (later sold to the current owner).

Edwin continues to participate actively on several domain discussion forums, and has been invited to be a panelist at various industry tradeshows. He is a director and co-owner of Memorable Domains Ltd, a UK based domain investment company with a portfolio of 7,000 .co.uk domains.

Nominet has proposed allowing the registration of domains directly under .uk (such as example.uk) for the first time.

Currently, there are over 10,000,000 domain names registered in the UK, and 93% of them are .co.uk domains. The internet economy contributes over £121 billion to UK GDP (at 8.3% it’s the highest of any G20 country).

However, Nominet is planning to turn its back on existing domain name registrants and make the .uk domains available to trademark holders first.

This would mean organisations such as Barclays stand to lose “bank.uk”, Kellogg would lose “breakfast.uk” and so on. Basically, Nominet are choosing to ignore the fact that just about every common English word and phrase has been trademarked by someone somewhere.

Generic domain holders on the other hand tend not to trademark their names because by definition they’re descriptive, and you can’t trademark something in the class to which it relates.

So far, Nominet have done a fantastic job of ‘burying the lead’ on this issue. Of the 51 news reports that followed their initial call for a consultation, only 2 mentioned anything about possible effects on existing domain owners, and this only in passing. Instead, Nominet managed to distract attention by making its “pitch” for the new domain space squarely about trust and security.

The proposed price point for .uk registrations is around £20/year wholesale, making them 800% more expensive than existing .co.uk domains. This would bring Nominet an overnight windfall of some £50,000,000 (for context, that’s more than double their 2011 revenue).

UK businesses would be left to pick up the bill, because they will have no choice but to try and secure the matching .uk domain for their existing .co.uk domain at any choice. Nominet has seen to that by packaging .uk with a suite of additional services designed to make “.uk” the most trusted and secure domain extension in the UK.

The flipside of course being that if something’s “more trusted and more secure” then everything else will be seen as “less trusted and less secure” – in other words, Nominet’s going to erode the existing very high trust in .co.uk in pursuit of new revenue generating opportunities.

It’s like washing powder ads, if the new powder “washes whiter” then who’s going to want to keep buying the old one?

Nominet’s proposal ignores best practices that have been established during similar transitions in other countries. In all other cases, the rights of existing domain owners have been acknowledged and they have been given priority over the matching 2LD.

It’s worth noting that Australia has considered and rejected a rollout of registrations directly under .au on a number of occasions, most recently in 2010 and 2007. The 2010 Names Policy Panel noted that “People thought the current 2LD hierarchy is well-known and understood, and introducing direct registrations would cause unnecessary confusion for little public benefit”. This is exactly the same issue facing .co.uk registrants.

I have prepared a detailed position paper on this issue. Packed with stats and data, it illustrates exactly who stands to win and who stands to lose, and it can be downloaded from: MyDomainNames.co.uk

About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.

Comments (20)

Great post Ed..
I think its a right time to monetize . The whole new wave of gtlds on the way.. Sure, there are tons of $$$$$$ to be made and i think Nominet have studied the market well… A whole new opportunity will open for the small and big business, Business will get a chance to register the right domain for theres business.
Here in Eu most of the countries have short extension eg:
.de
.dk
.fr
.se
.no
and show on…
So, it will make perfect sense for .uk

And there was a com and now we have co, a co.uk and some want .uk. IMHO .usa would be one of the few, as a business owner, I would feel compelled to buy. Also, IMHO many think it is dot us rather than dot U.S. As in you and me, us.

They auctioned off 1- and 2-letter .co.uk domains to businesses at the end of last year, netting a £3,000,000 windfall.

Now they’re proposing to throw all .co.uk registrants under the bus in favour of a blatant grab for cash.

In Nominet’s words: “Proposed key features include; verification to check a registrant has a UK address, daily monitoring for malicious software and viruses, and a digital signature which minimises the risks of a domain name being hijacked. These measures would be supported by a trustmark to give consumers a clear sign that it was a verified domain name.

The potential additional features incorporated in this proposed new product could help to create an even more secure online home for British businesses. They would help to guard against cybercrime, which costs the UK approximately £27 billion per year, and play an important part in creating a trusted space for businesses and consumers.”

It is undeniable that if you introduce something “better” (as Nominet is clearly suggesting with the above) then the existing product will be devalued in the eyes of consumers.

All of the above remains true regardless of whether I owned no domains at all, or a million. The facts don’t depend on MY domain portfolio!

Maybe there will be more opportunities from .com investors as more UK business may want to start promoting their brand on a .com rather than their current .co.uk domain extension. Especially if the are unable to get hold of their brand.uk domain.

There will also be more competition, but this also means more demand which can only be a good thing for .com domains.

there is a possibility that .uk could seriously mess up .co.uk but the whole explosion in tld can only generate chaos for the web. this will result in .com increasing in value and most everything else excluding country tld like .ie etc becoming a worthless novelity.

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